Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Time to dive into our 12th (!) annual review of the Fortune 500 list. Every year, this is one of my most popular posts, because it helps us follow the dollar and understand how drug channel intermediaries make money. Fortune’s 2019 list contains only six drug channel companies: AmerisourceBergen, Cardinal Health, CVS Health, McKesson, Rite Aid, and Walgreens Boots Alliance. Consolidation and vertical integration have transformed the channel—and the Fortune rankings. Below you will see our list of the companies that disappeared from the roster. We therefore have added to our analysis the four managed care and insurance companies on … Continue reading Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Drug Channels News Roundup, May 2019: Express Scripts’ New GPO, More on Amazon/PillPack, a BS Update, and Vegas Video

Summer is unofficially here! Before you break out the grill, check out these officially noteworthy items: Why did Express Scripts launch a GPO … in Switzerland? Behind the scenes of Amazon’s deal for PillPack More on BS in healthcare Plus, a fun video recap from Asembia’s 2019 Specialty Pharmacy Summit—including some footage of your friendly neighborhood blogger! P.S. Follow my daily musings and links to neat stuff at @DrugChannels on Twitter. Read more » Copyright © 2006-2019 Pembroke Consulting, Inc. d/b/a Drug Channels Institute. Drug Channels® is a registered trademark of Pembroke Consulting, Inc. This Feed is for personal non-commercial … Continue reading Drug Channels News Roundup, May 2019: Express Scripts’ New GPO, More on Amazon/PillPack, a BS Update, and Vegas Video

CVS, Express Scripts, and the Evolution of the PBM Business Model

Over the next week, CVS Health and Cigna will hold their annual investor days. (Links below.) They will offer business and financial overviews of their diverse companies, including an update on the outlook for their pharmacy benefit managers (PBMs). It’s a tough time to be a PBM. Compensation models are shifting, due to increased scrutiny by payers, regulators, and politicians. Plan sponsors are more sophisticated and seek greater pass-through of rebates, admin fees, and other manufacturer-provided revenues. Network spreads are under pressure, while specialty pharmacy dispensing accounts for a growing share of profits. Plus, the entire drug channel system could … Continue reading CVS, Express Scripts, and the Evolution of the PBM Business Model

Which PBM Best Managed Drug Spending in 2018: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics?

It’s time for our annual Drug Channels’ examination of drug spending reports. For 2018, we again aim our magnifying glass at the annual trend reports from four large pharmacy benefit managers (PBMs): CVS Health, Express Scripts, MedImpact, and Prime Therapeutics. (See their report links below.) The other large PBMs—Humana and OptumRx (UnitedHealth)—provide no public transparency into their performance. Using these data, which account for most of the commercial market, we detect the following key trends for 2018: Once again, we find that drug spending is not skyrocketing—contrary to what you often hear from journalists and politicians. Spending grew by about … Continue reading Which PBM Best Managed Drug Spending in 2018: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics?

The State of Specialty Pharmacy 2019: Industry Trends and Photos from #Asembia19

Last week, Paula and I had the pleasure of attending Asembia’s 2019 Specialty Pharmacy Summit at the wonderful Wynn Las Vegas. The Specialty Pharmacy Summit remains the most important forum for learning, networking, and conducting business throughout the entire specialty marketplace. Today marks the ninth year that I will violate Vegas code and tell you what happened there. Below, I offer reflections on the meeting, share my experiences during the featured session, and highlight four crucial specialty industry trends. You’ll also find a link to the conference’s Featured Session slides and cool photos—including two of the many selfies for which I … Continue reading The State of Specialty Pharmacy 2019: Industry Trends and Photos from #Asembia19

Independent Pharmacy Economics Keep Deteriorating (rerun)

This week, I’m rerunning some popular posts while I attend Asembia’s 2019 Specialty Pharmacy Summit. Click here to see the original post and comments from January 2019. Time for Drug Channels’annual look at independent pharmacy owners’ business economics, drawn from the recently released 2018 National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here’s the press release: NCPA Releases 2017 Digest. Below, I update our estimates on pharmacy economics and margins. Our analysis reveals that independent pharmacy owners have faced another year of deteriorating finances. What’s more, we estimate that in 2017, the average pharmacy owner’s salary fell to … Continue reading Independent Pharmacy Economics Keep Deteriorating (rerun)

My Wall Street Journal Op-Ed: Don’t Blame Drug Prices on ‘Big Pharma’ (rerun)

This week, I’m rerunning some popular posts while I attend Asembia’s 2019 Specialty Pharmacy Summit. Click here to see the original post and comments from February 2019. Yesterday, The Wall Street Journal published my op-ed: Don’t Blame Drug Prices on ‘Big Pharma’. The article text is pasted below for those who don’t subscribe. I wrote this piece for a general business audience, though my arguments about rebates and patient out-of-pocket costs will be familiar to regular readers of Drug Channels. Alas, I had to omit such insider terms as gross-to-net bubble, direct and indirect remuneration, and SpongeBob SquarePants. A personal … Continue reading My Wall Street Journal Op-Ed: Don’t Blame Drug Prices on ‘Big Pharma’ (rerun)

The Specialty Pharmacy Boom: Our Exclusive Update on the U.S. Market

It’s time for Drug Channels Institute’s annual update of the number of U.S. specialty pharmacies. As always, I had outstanding research assistance. (See photo at right.) But even we can’t count the total number of pharmacies dispensing specialty drugs, since any pharmacy can designate itself a specialty pharmacy. We therefore counted every pharmacy location that had achieved accreditation by an independent organization. Our exclusive findings: As of the end of 2018, more than 900 unique pharmacy locations had achieved specialty pharmacy accreditation from one or more of three major independent accreditation organizations. The 2018 figure marks a 25% increase over … Continue reading The Specialty Pharmacy Boom: Our Exclusive Update on the U.S. Market

The Top 15 Specialty Pharmacies of 2018: PBMs Keep Winning

In Drug Channel Institute’s list of the top 15 pharmacies of 2018, we show that many of the largest U.S. pharmacies are now central-fill mail and specialty pharmacies operated by PBMs and insurers. To complement that broader list, below you’ll find the Drug Channels Institute list of the top 15 pharmacies based on specialty drug dispensing revenues. As you will see, PBMs and insurers dominate specialty drug dispensing channels. The top four companies—all of which are fully or partly owned by a PBM—accounted for more than 70% of prescription revenues from pharmacy-dispensed specialty drugs. Payer- and PBM-owned specialty pharmacies’ market … Continue reading The Top 15 Specialty Pharmacies of 2018: PBMs Keep Winning

The Gross-to-Net Bubble Reached a Record $166 Billion in 2018

The gross-to-net bubble—the ever-growing pile of money that sits between a manufacturer’s list price for a drug and the net price after rebates and other reductions—reached another high last year. Drug Channels Institute developed the term gross-to-net bubble to describe the speed and size of growth in the total value of manufacturers’ gross-to-net reductions. We estimate that in 2018, the total value of gross-to-net reductions for brand-name drugs was $166 billion. As you will see below, that figure doubled over the preceding six years. Below, I also highlight the various elements that fill the bubble. About two-thirds of total gross-to-net … Continue reading The Gross-to-Net Bubble Reached a Record $166 Billion in 2018